Sharing the Gains of Local Economic Growth: Race-to-the-Top versus Race-to-the-Bottom Economic Development
Stephan Goetz,
Mark Partridge,
Dan Rickman and
Shibalee Majumdar
Additional contact information
Shibalee Majumdar: Agricultural, Environmental and Development Economics, Ohio State University, 2120 Fyffe Road, Columbus, OH 43210, USA
Environment and Planning C, 2011, vol. 29, issue 3, 428-456
Abstract:
In attempting to promote economic development, states often pursue either a race-to-the-bottom approach focused on lowering business costs or a more investment-based, race-to-the-top approach that aims to increase productivity, innovation, and entrepreneurship. Whether either approach promotes growth and produces broad-based economic gains across the population is the subject of this paper. The novelty of our approach is that an extensive array of variables representing examples of the two economic development approaches are examined for their effects on various indicators of state economic performance, including income distribution, over the 2000–07 period. We find that lower taxes are statistically insignificant in explaining state economic performance, and that targeted tax incentives and financial assistance—as currently practised—are more likely to harm growth and income inequality. Some support exists for state and local governments to encourage entrepreneurship and to enhance Internet connectivity.
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)
Downloads: (external link)
https://journals.sagepub.com/doi/10.1068/c1077r (text/html)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:29:y:2011:i:3:p:428-456
DOI: 10.1068/c1077r
Access Statistics for this article
More articles in Environment and Planning C
Bibliographic data for series maintained by SAGE Publications ().